Core view
Comprehensive combing of traditional Chinese medicine policies: the development context is clear. 2021 is the first year for the marginal improvement of policies
It is indisputable that the top-level design has consistently recognized and encouraged traditional Chinese medicine since the founding of the people’s Republic of China. After four different development periods, the transmission mechanism of TCM policy is gradually unblocked and the road of TCM development is gradually clear. The opinions on promoting the inheritance, innovation and development of traditional Chinese Medicine issued by the State Council in 2019 means that the development of traditional Chinese medicine has entered a new era of inheritance, innovation and development. In 2020, the important role of traditional Chinese medicine in covid-19 epidemic has further accelerated the pace of development. Finally, in 2021, the policy of traditional Chinese medicine has really ushered in the outbreak period, Heavy policies related to medical insurance and personnel have been implemented one after another. In the next 3-5 years, we can expect the continuous introduction of various policies along the two clues of inheritance and innovation.
The whole landscape of traditional Chinese medicine industry: the development of traditional Chinese medicine + traditional Chinese medicine service track is at the right time
Traditional Chinese medicine has a long history and unique Chinese characteristics. It is an important sub track of the medical and health service industry. It is estimated that the scale of traditional Chinese medicine industry will reach 2242 billion yuan by 2030, and cagr11.5 billion yuan from 2019 to 2030 3%。 Among them, traditional Chinese medicine and traditional Chinese medicine diagnosis and treatment services account for the highest proportion in the market of traditional Chinese medicine health services.
Traditional Chinese medicine has always been an important part of the China Meheco Group Co.Ltd(600056) industry. On the one hand, traditional Chinese medicine plays an important role in the catalogue of medical insurance and the catalogue of minutes; On the other hand, in terms of scale, after years of clearing and reform, Chinese patent medicine, Chinese herbal pieces and Chinese herbal medicines are developing in the direction of standardization and innovation, and the prosperity is gradually improving.
The market scale of TCM services in 2019 is 292 billion yuan, and it is expected to reach 1839 billion yuan by 2030, with a CAGR of 18.2%. The vigorous development of TCM diagnosis and treatment and TCM subdivision track will effectively drive the whole TCM health industry to set sail. The biggest driving force comes from the demand of patients. The number of TCM patients has continued to rise since 2010, with a total of 586 million in 2019.
Resumption of the market in the traditional Chinese medicine sector: after ups and downs, it ushered in an upward period. At present, it is still a high cost-effective track in the pharmaceutical sector
Reviewing the yield of traditional Chinese medicine since 2010, 2014 is an important turning point. In 2014, the gradual strengthening of medical insurance fee control led to a heavy blow to the traditional Chinese medicine injection that had benefited the most before, and the capital market also responded quickly. The classic Davis double kill, which killed the valuation first and then the performance, created the situation that the P / E ratio of the traditional Chinese medicine sector was lower than that of the overall medicine sector. Under the favorable policy, the traditional Chinese medicine sector performed well in 2021, and the valuation was repaired to a certain extent. However, from the perspective of the forecast PE in the next three years, the valuation of the traditional Chinese medicine sector is still cost-effective.
Track selection of traditional Chinese medicine: driven by policies, the industry has changed, focusing on innovative traditional Chinese medicine, brand traditional Chinese medicine, traditional Chinese medicine services and traditional Chinese medicine formula particles
2021 is the first year of the outbreak of the policy side, and positive changes are taking place in the industry side. Among them, the direction with the strongest certainty under the policy support is traditional Chinese medicine innovative drugs, brand traditional Chinese medicine, traditional Chinese medicine services and traditional Chinese medicine formula particles.
Innovative drugs of traditional Chinese medicine: in 2021, innovative drugs of traditional Chinese medicine ushered in an outbreak. In 2021, 12 new traditional Chinese medicine drugs were approved, more than the total of the past four years. Not only is the classification of traditional Chinese medicine registration simplified and innovative traditional Chinese medicine listed separately at the application end, but also traditional Chinese medicine has obvious advantages and moderate price reduction in the medical insurance negotiation at the payment end. Companies with the layout of innovative traditional Chinese medicine will stand out.
Brand traditional Chinese medicine: benefiting from the upgrading of consumption, the rapid growth of medical and health care demand, the demand for brand traditional Chinese medicine has a continuous growth trend, and the brand traditional Chinese medicine has a high price maintenance ability. The price rise of core raw materials + the price rise driven by strong demand will directly benefit the relevant brand traditional Chinese medicine.
Traditional Chinese medicine service: the medical and health service industry of traditional Chinese medicine has a large scale, high growth rate and has not seen the ceiling; The industry is scattered and small, and the competition pattern is not clear; Demand is expanding, and daily health management and “prevention and treatment” are favored; With policy support, it is expected to usher in a golden period of development.
Traditional Chinese medicine formula granules: the pilot work of traditional Chinese medicine formula granules was completed in February 2021 and the new standard was implemented in November 2021. On the one hand, the impact is the rapid expansion of market scale, on the other hand, the increase of threshold after standardization brings about the increase of costs and barriers. On the whole, the first mover advantage of previous pilot enterprises is obvious and will fully benefit.
Recommended targets (covered) and recommended targets of concern:
Innovative traditional Chinese medicine: Guiyang Xintian Pharmaceutical Co.Ltd(002873) (covered, buy rating), Guizhou Sanli Pharmaceutical Co.Ltd(603439) (covered, buy rating), Shijiazhuang Yiling Pharmaceutical Co.Ltd(002603) (covered, buy rating), Tasly Pharmaceutical Group Co.Ltd(600535) , Jiangsu Kanion Pharmaceutical Co.Ltd(600557) , Hunan Fangsheng Pharmaceutical Co.Ltd(603998) , etc;
Brand Chinese herbal medicine: brand Chinese herbal medicine:: Tsingtao Brewery Company Limited(600600) 60085 \\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\285, Zhejiang Shouxiangu Pharmaceutical Co.Ltd(603896) , Jiangzhong Pharmaceutical Co.Ltd(600750) Zhejiang Jolly Pharmaceutical Co.Ltd(300181) , Dong-E-E-Jiao Co.Ltd(000423) , Chongqing Taiji Industry (Group) Co.Ltd(600129) , Jiuzhitang Co.Ltd(000989) , Mayinglong Pharmaceutical Group Co.Ltd(600993) , Zhuzhou Qianjin Pharmaceutical Co.Ltd(600479) , Teyi Pharmaceutical Group Co.Ltd(002728) , etc;
Chinese medicine service: gushengtang (covered, buy rating);
Traditional Chinese medicine formula granules: China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) (covered, buy rating), Chinese traditional medicine, Tianjin Chase Sun Pharmaceutical Co.Ltd(300026) etc.
Risk tips:
Policy uncertainty; Uncertainty of raw material supply fluctuation; Uncertainty of market competition degree; Uncertainty about the progress of the epidemic.
